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Uber Technologies Inc., the online car-booking company that competes with traditional cab services, faces a roadblock in Vietnam after the government said its taxi service is illegal.

The mobile application-based service has no legitimacy to operate as a cab provider, the Vietnamese government said on its website, citing the country’s Deputy Transport Minister Nguyen Hong Truong. The government’s decision came after the Ho Chi Minh City Taxi Business Association complained about Uber’s cab operations. It isn’t clear by when Uber, which officially started operating there on July 31, has to cease operations.

Evelyn Tay, Uber’s head of communications for the Asia-Pacific region in Singapore, didn’t immediately reply to an e-mail seeking comment. The Vietnam Transport Ministry also didn’t immediately reply to faxed questions.

The setback in Vietnam is the latest for the San Francisco-based company in Southeast Asia after Thailand said it will fine drivers using private cars to provide commercial services and warned users against the app. That could dent Uber’s global expansion plans that underpin a valuation of the company of as much as $40 billion, making it worth more than Twitter Inc. (TWTR) or Hertz Global Holdings Inc. (HTZ)

Taxis wait for customers in downtown Hanoi, Vietnam. Uber faces a roadblock in Vietnam after the government said its taxi service is illegal. Photo credit: AFP

Uber, which has started operations in more than 200 cities since its founding in 2009, faces legal battles in countries including Germany amid complaints about unfair competition and lack of customer safety.

The city of Oslo reported the company to the police for lacking permits to operate there, and Toronto has also asked a court to shut down Uber.